Welcome to our monthly newsletter Valour Monthly Update – June ’23 where we share insights and developments from across Valour and the wider crypto space.
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State of the Market:
June can be predominantly characterised by the increasingly apparent shift in institutional interest towards crypto assets. Following investment titan BlackRock’s spot Bitcoin ETF application, prices increased some 17% (1W), closing at a net gain of 10% (30D). Spurring a tide of similar applications and refilings by the likes of WisdomTree, VanEck, Invesco and Fidelity, the price effect has been profound, solidifying Bitcoin’s 85% YTD (H1) increase, pushing the wider crypto market up 5% (30D), back beyond the $1.2tn mark.
Indeed, the month’s unfoldings have seen Bitcoin level out in the $30k range. With the outcome of the Fed’s June FOMC meeting signalling several further anticipated rate hikes, Bitcoin’s narrative as an inflation hedge has been reawakened – with an observable rise in open futures contracts. Seemingly, following the decision to maintain the federal funds rate between 5.00 – 5.25%, BTC’s correlation with the S&P 500 has fallen back below 0, whilst its correlation with gold and inverse relationship with the DXY continues to strengthen.
Whilst many displayed concern at the SEC’s rapid dismissal of ETF filings as ‘inadequate’ requesting further ‘descriptive detail’ to be able to make a judgement, the fact that the governmental agency has engaged in a form of discourse is not to be overlooked. With the wave of June’s institutional adoption expanding to Deutsche Bank’s digital asset custody application, the launch of Citadel and Charles Schwab-backed EDX Markets, as well as the listing of the first leveraged Bitcoin futures ETF on the CBOE exchange, crypto’s paradigm shift is becoming evidently more clear. Whereas the passage of time has both presented and challenged several of the sector’s previous narratives, the latest developments seem to indicate that narratives are gradually converging, a feat which will be cemented with further regulatory clarity and participation anticipated throughout the rest of 2023 and 2024.
In the News:
Policy
• Standard Chartered and PwC China have joined forces in producing a whitepaper on the application of CBDCs in the Guangdong Province, following the region’s $535bn cross-border trade in 2021.
• Circle Internet Singapore, the stablecoin issuer’s Singapore affiliate received a Major Payment Institution (MPI) licence from the Monetary Authority of Singapore (MAS), enabling the company to offer token services and cross-border transactions in the region.
• The Bank of Thailand has initiated a pilot program for a retail CBDC, collaborating with two further banks and Singaporean payment provider 2C2P, exploring the benefits of CBDCs in retail transactions.
• Hong Kong’s Monetary Authority has completed its public consultation on stablecoin regulations, aiming to introduce its full guidelines by 2024.
• Ripple has partnered with Colombia’s Banco de la República to pilot blockchain technology on the XRP ledger. Running through to 2023, the pilot will be overseen by the country’s Ministry of Information and Communications Technologies (MinTIC).
• The UK government has moved forward with its proposed Financial Services and Markets Bill aimed at strengthening the country’s financial services sector and adoption of crypto services.
• Swiss National Bank (SNB) has unveiled plans for a wholesale CBDC pilot, listing the wCBDC on the SIX digital exchange.
• The EU has outlined plans to leverage blockchain technology for verifying educational and professional credentials, with the EBSI Vector project improving the efficiency and security of cross-border credentials.
• The Tel Aviv Stock Exchange has completed the minting of its first test digital government bond ERC-1155 security token as part of the experimental blockchain project between the Ministry of Finance and the stock exchange.
Business
• German telecoms giant Deutsche Telekom announced that it is using its infrastructure to become one of the 100 validators providing staking and validation services on the Polygon network.
• Nike announced that its .swoosh NFT platform will be integrated with EA Sports games, unlocking a host of features and enhancing the personalised experience of virtual sports.
• Fashion giant Louis Vuitton has ramped up its Web3 efforts, launching the VIA Treasure Trunk, providing an immutable and transparent representation of the label’s iconic rectangular travel trunk.
• Ankr has widened its partnership with Microsoft with the introduction of AppChains, a blockchain creator tool that enhances accessibility and usability for developers launching dedicated blockchain solutions.
• Venture capital giant Andreessen Horowitz (a16z) has expanded its international presence with the opening of a London office, citing the jurisdiction’s embrace of blockchain technology and commitment towards favourable regulation for crypto and Web3.
Markets
• U.S-based multi-asset investment giant BlackRock has filed an application for a spot Bitcoin ETF with both the U.S Securities and Exchange Commission (SEC) and Nasdaq exchange.
• Following BlackRock’s spot ETF application, several other investment firms have followed suit, with the likes of Valkyrie, WisdomTree, Invesco and Fidelity amongst the new and refiled applicant holders.
• U.S-based options exchange Cboe Digital received approval by the United States Commodity Futures Trading Commission (CFTC) for margined BTC and ETH based futures contracts.
• The CME group has announced its planned introduction of ETH to BTC ratio futures, realising a new means for the relative trading opportunities between the two largest digital assets.
• MicroStrategy has purchased another $347m of Bitcoin bringing its total holdings to 152,333 ($4.5bn) at an average cost of $29,668.
• German Deutsche Bank has reportedly applied to the country’s financial authority (BaFin for a digital asset custody licence, signalling interest in widening its digital assets service offering, first announced in 2020. The Crypto.com exchange has been granted a Major Payment Institution (MPI) licence by Singapore’s Monetary Authority (MAS), covering Digital Payment Token (DPT) services.
• Banco Santander’s asset servicing arm, CACEIS Bank, has obtained a crypto custody licence from the French regulator. With more than $5tn in AUC, CACEIS will broaden its custody solution to digital assets in the French market.
• JPMorgan has expanded its blockchain based JPM Coin, introducing Euro-denominated for corporate payments, with German-based giant Siemens amongst the first to process a payment.
• Melanion Capital has listed a Bitcoin equities ETF on Amsterdam’s stock exchange, tracking the firm’s Bitcoin Exposure Index.
• Hong Kong-based First Digital Group has successfully launched its First Digital USD (FUSD) stablecoin on the BNB Smart Chain, backed 1:1 with USD reserves or highly liquid assets held by regulated Asian financial institutions.
• JPMorgan has continued exploring blockchain-based solutions, partnering with leading Indian banks (HDFC, ICIC, Axis, Yes, and IndusInd) for interbank settlement of US denominated transactions.
• Stablecoin issuer Tether has announced a partnership with Bitcoin-centric El Salvador, investing $1bn in the country’s renewable energy Bitcoin mining initiative, Volcano Energy.
Tech
• NFT platform Enjin has launched a new mainnet by forking the Polkadot parachain Efinity, thereby expanding the Web3 platform’s capabilities in the blockchain space.
• Polygon has unveiled a series of upgrades dubbed Polygon 2.0, aiming to become the value layer of the internet, enhancing capabilities to enable users to create, exchange and program value.
• USDC stablecoin issuer Circle is set to launch a native version of USDC on Ethereum-based Layer-2 scaling solution Arbitrum, speeding up transactions via the use of cross-chain transfer protocols (CCTPs).
• Total Ethereum staked on the Beacon chain has surpassed 23m, amounting to more than $43bn in value. With an APR of 4.5%, staking activation queues currently stand at 45 days.
• Layer-2 scaling solution ZkSync has outlined a new Hyperchains network testnet aiming to improve overall scalability and efficiency via a modular framework of ZK-powered Hyperchains.
Valour’s Monthly Overview:
June saw several material developments on the corporate front. Announcing the appointment of Sue Ennis to its board of directors, the company also provided highlights into AUM, net sales and the outcome of its 2023 Annual General and Special Meeting. On the product side, Valour’s launch of its first physically backed Bitcoin Carbon Neutral product on the Xetra exchange reflects the Company’s dedication towards providing trusted investor access to decentralised finance (DeFi) and the future of the digital economy, whilst maximising value for its shareholders.
June 22: Valour Inc. Appoints Sue Ennis to Board of Directors
Valour Inc. is pleased to announce the appointment of Sue Ennis to its board of directors. As an acclaimed leader in emerging technology and innovation, Sue has over 15 years of experience, raising more than $1bn for Canadian structured product and small cap companies. Currently VP of Corporate Development at Hut8, Canada’s leading data infrastructure operators and Bitcoin miner, Sue continues to have a significant impact on the trajectory of technology and innovation in Canada. With previous leadership roles at Shyft Network, Coinsquare, Voyager and Invesco, Sue’s dynamic career and dedication to the financial sector will benefit the Company’s path forward, reinforcing its mission to pioneer the integration of traditional capital markets and decentralised finance.
This news follows the appointment on June 20 of two other new Directors, Mikael Tandetnik and Stefan Hascoet.
June 21: Valour Inc. Provides Corporate Updates on AUM, Net Sales, and Other Corporate News
Valour Inc. announced several corporate updates for the month ending May 2023. At month close, Valour’s AUM stood at C$178.9m, with net sales increasing to C$475.2m. Meanwhile, Valour’s investment in partially owned SEBA Bank AG stood at C$37m. Recognising the substantial rise in AUM, CEO Olivier Roussey Newton highlighted that equity valuation underperformance followed the clean out of approximately 13m shares following an aggressive sell order. However, with the Company’s continued monthly growth and pipeline of new products, Valour will continue to increase its assets over the balance of the year. The Company also announced that Mr. Stan Bharti and Forbes & Manhattan, Inc. have divested their shareholdings in the company and no longer have any interest in it. In addition, the Company revealed that it has entered into shares for debt settlement agreements with various officers and consultants of the Company to settle an aggregate balance of $674,837.78 of accrued fees, issuing common shares of the Company at a price of C$0.085 per ‘Debt’ share. Subject to acceptance of Cboe Canada, the settlement agreements will help the Company strengthen its balance sheet by reducing its liabilities and further aligning the interests of officers and consultants with shareholders of the Company.
June 20: Valour Inc. Announces 2023 AGM Voting Results
Valour Inc. announced the voting results from its Annual General and Special Meeting of shareholders held on June 20, 2023. With 14.60% of all issued and outstanding shares of the Company represented at the meeting, shareholders approved the election as directors of, Olivier Roussy Newton (99.07%), Krisztian Toth (94.09%), William Steers (85.23%), Mikael Tandetnik (99.10%), and Stefan Hascoet (99.19%). Additionally, shareholders voted overwhelmingly in favour of the ratification and approval of the appointment of BF Borgers CPA PC, the Company’s auditors, with 98.8% in favour and 1.12% withholding their vote. Further to this, shareholders voted 98.26% in favour of the Company’s name change to ”DeFi Technologies Inc.,” with 1.74% withholding their vote on the Name Change. The board of directors expresses gratitude to shareholders for their continued participation and support.
June 15: Valour Announces the Launch of its First Physically Backed Bitcoin Carbon Neutral Product (ETP) on Frankfurter Wertpapierboerse XETRA
Valour announced the launch of its physically backed Bitcoin Carbon Neutral Product (ETP) on the Börse Frankfurt (Xetra) exchange. The 1Valour Bitcoin Physical Carbon Neutral ETP (ISIN:GB00BQ991Q22) offers investors exposure to Bitcoin and presents a trusted investment method that benefits the environment and aligns with ESG goals through the funding of certified carbon removal and offset initiatives.
Valour has partnered with leading climate action infrastructure provider Patch in the structuring of the ETP, ensuring all carbon emissions linked to the investment will be targeted to achieve a carbon neutral output. As the 13th ETP offered by Valour and the first product on its physically backed platform, Valour anticipates the launch of further innovative products, offering investors trusted access to decentralised finance and Web3.
Venture Spotlight:
Our portfolio companies continue to build their products and develop new partnerships. Here are some of their highlights for the month of June.
Boba Network announced that it had surpassed the 10m txn mark on BobaBNB. Having processed a record 3m transactions throughout the month of May, BobaBNB has seen significant month-on-month growth, up from 2.8m transactions in April, 500k in March, and 99k in February. In addition to several new partnerships and integrations, Boba increased its wallet count by 80,000, with approximately 200k daily transactions.
CLV announced the integration of its CLV Wallet with GateKeeper for PolygonID Verifiable Credential Management. The new partnership will enable users to issue, claim and store verifiable credentials powered by PolygonID. Meanwhile, CLV announced a further integration with the first crypto-biometric network Humanode chain, enabling the utilisation of HMND through the multichain wallet.
Skolem expanded its support for a number of Layer-2 blockchains as well as adding a new execution feature to enable swaps between wrapped and unwrapped native currencies (wETH, ETH, wMATIC, MATIC, wAVAX and AVAX). On the platform front, the team announced that it has started building dashboards for blue chip DeFi protocols directly on its front-end, providing users with simple access to money market data, starting with AAVE v2.
Sovryn announced several general updates including a system upgrade that enables support to WalletConnect v2.0. In addition to work on a non-custodial bridge between Stacks and Rootstock to bring Sovryn’s 100% Bitcoin-backed $DLLR stablecoin to Bitflow liquidity pools, crypto wallet provider Exodus announced that it has added the Sovryn Dollar to its corporate treasury and user wallets.
Volmex launched the public testnet of its perpetual futures exchange protocol. Based on a decentralised matching engine and order book that is underpinned by off-chain relayers, the perpetual futures contracts enable users to hedge, diversify, and speculate with crypto volatility products. Volmex will expand the testnet to additional ETH-based L2s in the coming weeks, enabling support for additional stablecoin collaterals.
Wilder World published their first dev log providing updates on the metaverse’s latest version (v.0.1.15). Focussing on updates to Wheels, Wiami, and zSpace, the log provides users with an in-depth overview of the latest developments across the Wilder World ecosystem.
Valour ETPs
For the month ending June, Valour reported an increase in total assets under management to $140.6m, as aggregated net sales continued to steadily increase. Notwithstanding the recent increase in price levels across the crypto space, Valour’s pipeline of products across both its certificates and physically backed issuance programs will undoubtedly contribute towards further growth, suitably positioning the company ahead of further market developments.
Valour offers fully hedged digital asset ETPs with low to zero management fees, with product listings across European exchanges, banks and brokers. Valour’s current product suites includes 12 unique ETPs including, Cardano (ADA), Polkadot (DOT), Solana (SOL), Uniswap (UNI), Avalanche (AVAX), Cosmos (ATOM), Enjin (ENJ), Binance (BNB), Bitcoin Carbon Neutral, and Valour Digital Basket 10 (VDAB10). Valour’s flagship Bitcoin Zero (BTC) and Ethereum Zero (ETH) products are the first fully hedged, passive investment products with 0% management fees.
For more information on products and offerings, visit: https://valour.com/.
